Friday, 2 May 2014

Volatility falls into the weekend

Despite a brief equity upset in late morning, the VIX struggled to hold minor gains across the day, settling -2.6% @ 12.91 (intraday low 12.83). Near term outlook is for the sp'1925/50 zone, which should equate to VIX in the 12/11s. Across the week, the VIX declined -8.2%.





The fact the VIX broke into the 12s this morning was again testament to the near zero amount of concern in the US capital markets.

This was the lowest weekly close since early January, when sp'1850s. Considering the issues in the Ukraine, and the 'sell in May' seasonal equity issue, this is a remarkably low VIX.

At some the relatively near term, VIX is going to surge back into the 20s, but right now, that doesn't seem likely until mid/late June.

more later, on the indexes

Closing Brief

US equities closed the week with minor price chop across much of the day, sp -2pts @ 1881. The two leaders - Trans/R2K, settled -0.3% and +0.2% respectively. Near term outlook is for new index highs (at least in the sp/dow/trans), perhaps getting stuck by mid/late May.



...and another week comes to a close. Congrats to all those who survived it!

All things considered, the bull maniacs held the line from Monday afternoon at sp'1850, and with the push into the low 1890s earlier this morning, the broader trend is indeed very much still intact.

Best guess, sp'1925/50 within the next 4-6 weeks, and then a major rollover. There are some discernable 'market rumbles' out there, and I will be looking for a 7.0 quake as soon as late June.

Sincerely...have a good weekend everyone!

*The weekend update will be on the world monthly indexes

3pm update - melting into the weekend

US indexes look set to close the week with some very minor price chop. However, across the week, it has been about broad, and somewhat significant upside of around 1%. The Monday spike floor of sp'1850 is now a fair way lower, and the sp'1900s still look due next week.



*stripping away all the labels/counts....we have a weekly chart of net gains, and the third green candle.

Barring a break <1850..and more importantly, the 1814 low, equity bears should probably be on 'trading account preservation mode'.

*I will hold heavy long across the weekend, not least since a few of my stocks have earnings next Tue/Wednesday.

updates into the close..although really, I don't expect any major swings..either way.

3.12pm.. watching clown finance TV, with Santelli and Liesman.....gotta love it!

Minor up wave..back to the sp'1883...and even a few of my longs finally turned green for the day.

3.20pm.. VIX melting lower...set to close in the 12s.

3.25pm.. Here is a somewhat random question, but did Ms. Eisen on CNBC, get a mind wipe, when she transferred from Bloomberg?

I realise they are largely reading from a tele-script, but really, what a change!

Meanwhile...metals are cooling a little.. Gold +$11.

3.40pm.. minor chop continues...Mr Market just washing a few of the weaker bulls out... nothing more. Strong support in the 1875/70 zone...bears won't be able to break least not today!

VIX 13.03...still set to settle in the 12s.

2pm update - hourly cycles just resetting

It is a somewhat quiet end to the week. The hourly index cycles are arguably just churning largely sideways, as the underlying cycles are reset for next week. Metals are holding the gains, Gold +$16, with Silver +2.3% - although that still makes for net weekly fractional declines.



No doubt some will be calling for major declines next week, after all, the jobs number was good, and we didn't surge, right?

Well, I can only highlight the previous Friday jobs event, where we saw a key double spike top in the morning,and then plunged like a rock. We sure aren't seeing that today, and frankly, price action still looks very strong.

Considering the net weekly gains for ALL the main equity indexes, I'm holding to the original target zone of sp'1925/50.

2.13pm.. minor weak chop continues. Just like yesterday, market should find strong support around 1875.

Again, it is notable that despite the index weakness...VIX is only +1%...still set to close red.

1pm update - melting into the afternoon

The market has settled down after the brief morning snap lower. With broad underlying upward pressure, we look set for very quiet afternoon price action. VIX looks set to close the week in the 12s. Metals are cooling just a little from the earlier surge, Gold +$14.



Not much to note.

A look at the bigger weekly charts should clarify things..

Dow, weekly

Not exactly bearish, is it? Upper bol' offering the 16700s in the immediate term.

*I remain heavy long, and barring a late afternoon surge, I'll hold across into next week.

1.41pm.. minor weak chop, but really, is that all the bears can manage?

From a purely cyclical perspective, today's action is very natural...I'll cover that some more in the next hour.

12pm update - choppy morning

It has been a bit of a choppy morning in market land, with sp' trading between 1880/91. Despite the late morning snap (Ukraine issues), the VIX remains subdued, and is not indicating even moderate concern into the weekend. Metals are holding sig' gains, Gold +$16



So..bull maniacs get a headline jobs number that is way above expectations. We've seen the market break into the 1890s - last seen at the previous jobs number a month ago.

Overall though, it looks to be a quiet end to the week, with net weekly gains for all indexes. Clearly, the 1900s aren't happening today, but next week...I'd still guess.

VIX update from Mr T.

time for tea (or wine?)

11am update - minor snap down

A minor (if sharp) snap lower in the indexes from sp1891 to 1880....with the VIX flipping back to positive. Metals snap higher, Gold +$8, Silver +1.9%.




It would seem the market is getting a little twitchy on news from the Ukraine. 

As ever though, this does nothing to the broader trend.

time for lunch.

11.27am Minor weak chop. The real action is in the metals, with Gold +$16, and Silver +2.7%, pretty big turn around  there.

Despite the brief upset over the Ukraine story, VIX is only +1%..not exactly it?

10am update - underlying upside

Equities open with some minor chop, but the underlying upside is clear for anyone to see. The equity bears are powerless, and it is just a matter of when the sp'1900s will be hit, whether late today..or next week. Metals are a touch lower, Gold -$3, whilst the USD is +0.4%




*VIX has already been knocked into the 12s, and if sp'1900s, then we'll be in the 11s next week. The only issue for me is whether we'll briefly see VIX 10/9s, whilst sp'1925/50 zone in May/June.

So, we're a little higher, but nothing least not yet.

It is somewhat amusing to see the mainstream in two minds about the employment data. They do recognise that despite the headline numbers coming in okay, the underlying participation rate is just lousy.

I remain heavy long - not least via the Oil/Gas drillers of DO, RIG, and SDRL. I will seek to drop them later today.

10.09am.. I could post a long list of charts..but suffice to say..the R2K is set to break the down trend resistance (Nasdaq already has)....and we have the Dow, Trans, Sp'..all set to break new highs.

The fact VIX is already in the 12s...should give enough clarity to anyone, about where we are headed.

Pre-Market Brief

Good morning. Futures are a touch higher (ahead of the jobs data), sp +2pts, we're set to open at 1885. Metals are a little higher, Gold +$2, with Silver +0.5%. Equity bulls should be pushing the 1895/1905 zone today..and into next week.



*awaiting the monthly jobs data...


Video from Mr Hunter

Not particularly financial in nature this video, but still...a fair few interesting stories.

8.30am... 288k net gains... 6.3%... oh boy..the mainstream is going to ramp this as 'RECOVERY to da moooooon'.

8.40am.. Futures jump a little, but nothing significant, and we're back to where we started.

Regardless, equity bears can't call the number in their favour, and with the weekly charts bullish, market should rally.

8.52am.. sp +3pts.... 1886.

Anyone still think we'll close the week <1850 ?  

9.24am.. Well, long day ahead...lets see if we can break into the 1890s..and challenge a new high by the late afternoon.

Awaiting the 1900s

The market looks set for the sp'1900s, whether tomorrow, or more likely...early next week. The underlying price pressure remains to the upside, and equity bears have been entirely absent since the Monday spike floor of 1850.



A somewhat tiresome day, so I'll keep this relatively short.

We continue to have a third consecutive green candle on the weekly charts, and without question, the broader trend favours the bulls. The sp'1895/1905 zone looks viable as early as tomorrow.

Looking ahead

Tomorrow will be all about the jobs data - although there is also factory orders.

Market consensus is for 215k net gains, with a slightly lower headline rate of 6.6%. However, I'd be surprised if the market fell, unless the gains are less than 175k.

*next sig' QE-pomo is not until next Monday

Holding heavy long overnight

I held to the plan, and picked up the drilling stocks - DO, RIG, and SDRL, that I had dropped late Wednesday. I certainly didn't catch the lows, but my re-entry levels were in my target zone, so I can't complain.

All things considered, equity bulls should do okay tomorrow. A break below the recent 1850 low looks very unlikely in the immediate term. Indeed, I am expecting a break to new historic highs in the Dow/Sp/Trans, whether tomorrow..or early next week, makes little difference to me.

Goodnight from London

Daily Index Cycle update

It was just another quiet day in market land, with the sp'500 settling -0.3pts @ 1883 (intraday peak 1888). The two leaders - Trans/R2K, settled +0.6% and -0.1% respectively.  Near term outlook is for sp'1895/1905, which will likely equate to VIX in the 12/11s.



Nasdaq Comp'


The battered tech' index has already taken a peek above declining resistance, and frankly, the 4200s look an easy target tomorrow..or early next week.

Equity bears were entirely absent yesterday, and today was no different.

a little more later....